SchifferLine 15 April 2014

Timely Real Estate News………………………………………………….15 April 2014**************************************************************************************************************It’s That Time of Year….celebrations honor long traditions

Happy Passover — April 14 thru April 22! Happy Easter — April 20! It’s that time of year when for many we gather our families and friends to celebrate these treasured religious holidays. And let us not forget April 15, and I don’t need to remind you what day that is.

**************************************************************************************************************A Wow! Month…..March came in like a lionThe lions of March were not timid: They came roaring in with record sales and increases across the board in all five of the communities I report on — Beverly Hills, Beverly Hills Post Office, Bel-Air, Brentwood and Westwood/Century City. Sales volume was a true “wow” — with a total for year-to-date of $703 million vs. $476 million a year ago as of March 31, 2014. There were a few over-the-top sales last month — considering the Fleur de Lys property — which closed escrow for $102 million, but that doesn’t account for the rest of the positive sales volume. With the exception of Brentwood, every community was up in sales volume over last year. For example, Beverly Hills sales for 2014 YTD was $213 million vs. $135 million in 2013….Beverly Hills Post Office was $112 million vs. $76 million; Bel-Air was $231 million vs. $115 million (where the large sale took place), and Westwood/Century City was $42 million vs. $27 million. Again, the increases in sales volumes speak to the increasing sales prices, greatly influenced by the lack of inventory.

**************************************************************************************************************Median Sales Prices are strong for this time of yearWhat is remarkable in March statistics from the MLS is that all five communities are up substantially for median sale prices. While a $102 million sale can greatly influence average sales and total sales volume, they do not have the same weight as the median sales price since that figure is defined the “median price” equidistance from the highest to lowest price. So, the breath of increases in the median sale price for “year-to-date” represents a strong, firming trend in our communities. I have always pointed out that the “year-to-date” median sale price is much more accurate in tracking how a community is doing. Each community can have an “up” month and then a “down” month. That comes with the residential territory. But our year-to-date #s actually reflect a more consistent, professional view.

Leading the increase in year-to-date was Bel-Air with a 53% increase in median sale price of $1.990 million through the first quarter of 2014, followed by Westwood/Century City which showed a 40% increase over last year at $1.750 million; BHPO had a 37% increase at a $2.435 million median sale price; Brentwood was up 20% for the first three months at $2.600 million; and Beverly Hills was at $5.325 million.

Sale prices remain fairly robust in the $3 million-plus category — Beverly Hills had eight over $3 million, the largest was $10 million; Beverly Hills PO had five over $3 million with a $16 million and a $22 million sale recorded in March. Of course, there was the $102 million in Bel-Air; and there were three over $3 million in Brentwood. Westwood/Century City is still in the below-$2 million range.

It is rare, to be honest, that we see these level of median sale price increases over the previous year, especially in the first part of the annual reporting period. But remember, we had a very strong year in 2013, and most of the sales reported in January and February were actually sold in November and December of last year. Also, we were not burdened by bad weather — in fact, our weather probably added to the appeal to foreign buyers, which are flooding our market. Many of these are cash buyers, and they are hungry to make an investment in our residential real estate.

Month-to-month median sale price increases are also impressiveA month does not a year make. I’ve been mentioning this for years it seems, and yet, I am always anxious to see “last month sales” results. So I am going to focus on the good news (there is no bad news). Comparing median sales prices for March 2014 to March 2013, you can put a smile on your face: Bel-Air was up 55% for March 2014 compared to the previous March….Brentwood’s median sales price was up 28% for the same month-to-month period; Westwood/Century City was up 22%; Beverly Hills Post Office was up 21%; and only Beverly Hills’ median sale price was near its March 2013 figure — just up 1% for March 2014. When you factor in the across-the-board year-to-date median sales price increases over last year, the trend is clear: Sale prices are moving upward on a month-to-month basis. You have to realize, too, that these blockbuster transactions we have reported for last month and now another one just hit the market (for $135 million), we are experiencing somewhat of a roller-coaster ride in home prices. We do seem to attract a lot of attention with our large sales.

No, we are not near the previous highs of 2007 yet (on average) in these five communities, but as I reported last month in the SchifferLine, we are seeing steady improvement in homes prices in Culver City, Palms/Mar Vista, and Venice as these three communities have kept up with 2007 prices or even exceeded them.

Suffice it to say, we are witnessing a strong, exceptional start for 2014, and that is good news. This progress will remain challenged, however, by the economy — in Los Angeles in particular, for the next nine months. Without sounding like a cliché, “stay tuned”. (See the Anderson Report below.)

**************************************************************************************************************Fleur de Lys sells for $102 million, but you can get it for only $400,000/monthIt’s always nice to have multiple offers when you put your $100 million-plus home up for sale. So we expect the homeowner was happy when three buyers engaged in a “bidding war” for the nearly five-acre trophy estate in a 10-day, all-cash deal for a reported $102 million, a record for Southern California. The transaction for the 50,000-square-foot residence also included the antique furnishings. The home had been previously listed at $165 million, and according to the Los Angeles Times was priced most recently at $115 million. This is an incredible home surrounded by magnificently sculptured gardens, waterfalls, tennis court, and of course a spectacular swimming pool. The home has 30 bedrooms and 40 bathrooms….and you can lease it for $400,000 a month.

OK, make that $600,000 a monthIf the Fleur de Lys doesn’t satisfy your housing and entertaining needs, the famous Beverly House just came on the market –asking price – $135 million. This six-acre compound in Beverly Hills is also available for lease for $600,000 a month. What makes this home unique, however — besides its magnificent gardens, tennis court, and swimming pool — is that it was the site of the “horse scene” in “The Godfather”. You can bet if the two losing buyers are still interested in the “neighborhood”, they’ll be looking at the Beverly House, too.

***********************************************************************************************UCLA Anderson Forecast — economy to rebound in springIt was one of the harshest winters in history, but according to UCLA Anderson Forecast that “while weather ravaged much of the county”, except here in Los Angeles, “the expected national growth in the first quarter didn’t happen; however, the economy should rebound in the spring.” Weather-impacted activities such as factory production, automobile sales and construction all took a hit according to Anderson, but are expected to make up for time lost, leading to GDP growth in the 3 percent range. That rate is forecasted to persist through 2016, boosted “by increased housing and business investments, as well as gains in consumer spending.”

The report goes on to say there are troubling signs on the horizon for Los Angeles, which has ranked near the bottom of job growth since 1990. This is just one of the many issues we are facing here in Los Angeles according to Forecast Economist William Yu, who points to the high cost of housing and commuting, and an “unfriendly business environment.” Our job growth, he reports is joined by Cleveland and Detroit with a negative job growth in the last 23 years. He does mention, however, that the West Los Angeles region “has had healthier job recovery compared to other parts of the country.” So….we escape in this part of the world, but the rest of Los Angeles is suffering he says.

Yu proposes that Los Angeles advance its “human capital” by improving local public schools and finding ways to attract highly educated individuals to the city. Los Angeles, he stated, has to become more business friendly if it is to create more jobs for the less educated.

***************************************************************************************************************What’s it all about, Carole? A “timeout”!The market slowed somewhat in the first two months of 2014, but it has been “sizzling” during the past six weeks. Perhaps it is spring that is causing this ramp-up in buyer and seller activity across the board. I’m getting calls from both buyers and sellers from around Los Angeles, which made me muse the other day that because I am a resident of Bel Air Crest (which I love) and do a fair amount of business in Mountaingate, my real estate experience and expertise is really far reaching.

Yes, I’m known for being one of the top experts in gated communities on the Westside, but my net reaches into San Fernando Valley, to Malibu, Orange County and even San Diego. From gated communities to large estates to medium-sized or small homes or condos. I have fortunately experienced transactions selling all types of property. You see, I live, eat, and breathe residential real estate.

I am genuinely very lucky to have found a career where my passion for helping people and representing some of the finest clients in the world find or sell incredible homes. Being located at the core of some of the finest real estate in the world is one the grand benefits I have had in my life. So, if you’re looking for property anywhere of any size, type or price, I’m your gal. I truly want to help you in the most professional manner possible. The number is 310-442-1384.

***************************************************************************************************************So, what’s with your smart phone and how can it help me find a home?Not everyone owns a smart phone or a tablet — or even wants one. 34% of US adults own tablets (think iPad) and 56% own smart phones (think iPhone or Galaxy). The impact of these mobile devices on the real estate industry is growing by leaps and bounds. Let’s take a look at these “mobile” generations which are known to demographers as Gen X and Gen Y:

Gen Xers were born between 1966 and 1976 and would be in their late 40s at the top end. Gen Yers were born between 1977 and 1994 and are in their early 30s today. Most “Gen X” and “Gen Y” homebuyers are using mobile devices when they search for homes, but when it comes to choosing an agent, buyers of all ages are much more likely to rely on referrals from a friend, relative or neighbor than to end up with an agent they find online. That’s according to an annual survey by the National Association of Realtors, which found that among buyers 59 and older, 20 percent or less searched for a home via a mobile site or app.

Among homebuyers Gen Y buyers 58 percent used a mobile website or application to search for a home. For “Gen X” buyers, the figure is 53 percent.

Of the Gen X and Gen Y homebuyers who used a mobile site or app to search for a home, 22 percent and 26 percent, respectively, found their home with a mobile app. By contrast, only 4 percent of all buyers who used mobile search found their agent with a mobile app. And of course, that’s my challenge — how to grab those agent-searching clients! That is why referrals from YOU are so important to me!

More than half of millennials,52 percent, found their agent that way, while older buyers were more likely than millennials to use an agent they had used previously to buy or sell a home.

Counting individual agent sites operated by two-thirds of National Association of Realtors members, there are nearly 1 million real estate websites, and consumers typically go to multiple sites. Millennials were somewhat more likely than older age groups to take more actions online as a result of an Internet home search, including requesting more information, looking for more information on how to get a mortgage and general homebuyer tips, pre-qualifying for a mortgage online, applying for a mortgage online, and finding a mortgage lender online.

Use of Internet to search for homesMillennials accounted for the largest share of homebuyers, 31 percent, followed closely by Gen Xers and baby boomers, both at 30 percent. The Silent Generation made up 9 percent of buyers. Three-quarters of millennials were first-time homebuyers. Only 12 percent of sellers were millennials. Given that millennials are the largest generation in history after the baby boomers, it means there is a potential for strong underlying demand. Moreover, their aspiration and the long-term investment aspect to owning a home remain solid among young people,” said Lawrence Yun, NAR’s chief economist, in a statement. “However, the challenges of tight credit, limited inventory, eroding affordability and high debt loads have limited the capacity of young people to own.”

**************************************************************************************************************** Recoup of Funds Used for the Recent Purchase of the Subject Property

If in the past 12 months, you have purchased a property for all cash (no loan), and now wish to recoup or pull out some of that cash, there is a way to do that. This is possible immediately after closing via a cash-out refinance and up to a specified loan-to-value. Here are some of the requirements:• Owner occupied primary residences and second homes are eligible any time after the original purchase.• Investment properties are eligible 6 months after the original purchase.• A satisfactory letter of explanation with supporting documentation as to why the property was bought using cash and the reason they are now seeking to recoup their monies.• Copy of Certified Final Closing Statement for the purchase of the subject property which confirms that no mortgage financing was used to obtain the subject property. The preliminary title search or report must also confirm no liens on the subject property..• A copy of the sales contract with all counter offers and/or addendums and a copy of the certified escrow instructions to confirm if any personal property was included in the sales price. The sales contract must be reviewed for any discrepancies. Any discrepancies/red flags must be addressed.

There are a few more requirements, which I would be happy to review with you and refer you to my preferred lender, First Capital to assist you.

For those of you who are long time readers of The Schiffer Line and have asked me about what is happening with my family, here is a short update. My Mother who still lives alone at 92 is planning on us visiting my sister and her family in Vancouver for Moms birthday so that she can see the almost finished product of my sister’s house remodel (there have been inquiries from Architectural Digest about the house). My niece Morgan & her boyfriend Ben are now living in Vancouver and loving it. Ben graduated from University of Colorado Law School in December and is studying for the bar, and hopes to be able to continue his career path as a sports agent, while Morgan is working and going to school. My nephew Connor is finishing his third year at Concordia in Montreal and trying to figure out where he should attend business school (either UBC in Vancouver or Concordia in Montreal). He wants to pursue a career in real estate!

Please let me know how I might assist you with any of your real estate needs.